APPENDIX B:
INCORPORATING GENDER IN LOAN AGREEMENTS Below is a sample term sheet, highlighting areas where gender-specific provisions can be incorporated along with some practice tips. This document should be read as a practical overview of key points. Please note that this is for informational purposes only and shall not be construed as legal advice under any circumstances.
Provisions
Commentary
INTRODUCTORY PROVISIONS Recitals
These are introductory statements used to express the intent of the parties in the transaction. The recitals may clarify the charitable or impact-related purpose of the investment. U.S. investors who are subject to tax or regulatory requirements for their investment activities may use this section of the agreement to signal that the investment is intended to fall within program-related investments (PRI) for U.S. foundations or activities that further charitable missions for U.S. charitable organizations. Recitals are non-binding provisions and can be easily negotiated with the borrowers.
Definitions
Many key concepts in the agreement are captured using defined terms. Defined terms may need to be updated to reflect agreed-upon GLI objectives and concepts.
FINANCIAL TERMS Disbursements
Where a loan is separated into multiple disbursements, investors may include GLI goals or reporting metrics as a condition to disbursements. These are “conditions precedent” to disbursement. In negotiating these conditions, the parties should consider: (1) the borrower’s ability to achieve and measure the requirements, (2) the borrower’s ability to do so within the timeframe of the loan, and (3) the borrower’s need for the funds. Note that gender-specific conditions may not be suitable for all transactions due to the level of complexity and burden on both borrower and lender.
PERFORMANCE COMMITMENTS Representations and Warranties
Representations and warranties assure the lender that at the time of signing the contract and each disbursement of funds, (1) the legal, financial, and regulatory affairs of a borrower are in order; and (2) the factual and legal predicates to the investment are fulfilled. This section may be used to describe those aspects of the borrower’s mission and operation that reflect its gender-specific commitments. For lenders employing a gender lens, representations and warranties may be easier to negotiate with borrowers if they are not linked to events of default.
G E N D E R L E N S I N V E ST I N G : L E G A L P E R S P E C T I V E S
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